The Role of Psychological Capital in Enhancing Organizational Outcomes

Psychological capital (PsyCap) plays a crucial role in enhancing organizational outcomes by fostering positive employee attitudes, behaviors, and performance. Comprising self-efficacy, optimism, hope, and resilience, PsyCap influences leadership styles, motivation, and satisfaction among employees. Research indicates that higher levels of PsyCap correlate with increased creativity, commitment, and reduced job stress. Organizations can leverage PsyCap to overcome challenges, enhance efficiency, and maintain competitive advantage in the global market. By integrating positive psychological practices, companies can cultivate a resilient workforce capable of driving innovation and achieving sustainable success.

Running head: Organizational behavior
Organizational behavior

Organizational behavior
(Literature review: Psychological capital and its influence on the positive organizational
outcomes)
The paper talks about the significance of the psychological capital in the organization. It
explains that how positive psychological capital influence the results and outcomes of the
organization. Further, it describes the four components of the psychological factors such as self-
efficiency, hope, optimism, and resiliency. It describes that how these components help to
improve and enhance the effectiveness, productivity, and efficiency of the workers. It tells that
how psychological factors provide various competitive advantages in the world.
Human resource plays a vital and significant role in the success and growth of the
business. Therefore, psychological capital plays an integral role in each and every organization.
The psychological capital refers to the development and positive state of an individual as
characterized by high self-efficiency, resiliency, hope, and optimism (Walumbwa et al, 2011).
The positive thoughts, ideas, and characteristics create positive relationship and experiences. In
today’s era, the scope of the psychological capital is very wider. The psychological capital
includes power and positive aspects and features of human behavior. The psychological capital is
used by the various authors in order to determine the goals and objectives of the firm. Avey et al
(2011) said that there are four elements of the psychological capital which include hope,
optimism, hope, and resiliency. The psychological capital is the mixture of the four components.
These elements help to improve and enhance the performance and effectiveness of the
organization. The four elements of the psychological capital have been discussed below (Luthans
et al, 2015).
Self-efficiency: Sweetman et al (2011) said that self-efficiency shows the general trust and belief
of the people while demonstrating their efficiency and performance within the organization. By
using self-efficiency, the company can improve the performance of the employees. Now it is
assumed that high self-efficiency can affect the motivation of the employees. If the people are
self-efficient then they can improve and enhance the motivation of the workers. Further, the
employees choose challenging tasks to improve the productivity and effectiveness within the
organization. Walumbwa et al, (2011) said that self-efficiency is not related to the employees’
capabilities and competencies it is connected to the belief and abilities of the personal. Now it
can be said that there is a positive and strong relationship between performance and self-
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Organizational behavior
efficiency. Hence, this favorable relationship provides job satisfaction and job security to the
employees Sweetman et al (2011).
Hope: The sense of expectations and agency are required to attain the desired goals and
objectives within the organization. On the other hand, hope may be defined as an energy which
focuses on the personal objectives and goals (Wang et al, 2014). It is tool and technique which
motivates and enhance the people for doing work effectively and efficiently. After the various
researchers conducted by the Cetin (2011), where he said that hope and desires play a significant
role to provide right direction to the people in the global market.
Optimist: Optimist managers and employees play a significant role in order to increase the
success and growth of the company. The optimist people enjoy their life while pessimist people
do not enjoy their life Sweetman et al (2011). The optimist people are able to resolve the key
issues and challenges in the organization. The optimism may be defined as psychological
expectations and intentions in order to accomplish the mission and vision of the firm. It also
provides a chance to make the life easy and reduce the stress and frustration of the life. It also
helps to improve the psychical and mental health of the people (Choi and Lee, 2014).
Resiliency: The resiliency may be defined as a tendency to reduce the depressing and adversity
process. It also focuses on the success and goals of the organization. It also helps to reduce and
eliminate the obstacles and negative situations (Norman et al, 2010). The resilient people can
easily adopt the changes in the life. The resiliency can also be developed by focusing on the risk,
key challenges, and assets of the organization. Now it is assumed that psychological capital also
helps to gain the competitive advantages in the global market. Further, the company must focus
on the positive behavior of the people to increase and enhance the productivity in today’s
globalization world. Abbas and Raja (2015) said that success and growth can be obtained by the
psychological capital because it renders an opportunity for training and development to improve
the efficiency of the employees.
It is true that psychological capital influence the positive organizational outcomes and
results. This also helps to manage and operate the trading activities and operations of the
organization. The four components also play a significant role in order to develop and enhance
the knowledge and experience of the people (Choi and Lee, 2014). Further, targeting also plays a
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vital role in an organization to develop and build individual hope and expectations in the
organization (Cameron et al, 2011). Hope is the effective tool to attain the targets and goals of
the firm. Along with this, optimism is a fact which can be controlled and managed by the stress
management. Psychological capital also helps to provide job satisfaction to the workers. In this
way, it also increases and maximizes the outcomes and revenue of the organization. Job
satisfaction also encourages and motivates the employees for performing task and duties
effectively and efficiently within the organization. The job satisfaction has a favorable
relationship with performance, efficiency and organizational commitments (Norman et al, 2010).
If the job satisfaction is related to the negativity then it increases the absenteeism and employee
turnover in the organization. Therefore, it the company wants to achieve positive outcomes then
it should provide job security and job satisfaction to the employees (Wang et al, 2014). Now it
can be said that organization can create a favorable relationship between efficiency and job
satisfaction by managing their current systems and evaluating and understanding their worker's
needs, expectations, and desires. The employees are the main source to attain the success and
growth of the firm. Along with this, positive psychological factors also help to improve the
motivational factors in the organization. It also helps to maintain a peaceful and healthy working
environment in the organization. Job satisfaction is one of the biggest and important components
of the psychological capital (Peterson et al, 2011).
The motivation and personal success are provided by the positive psychological capital. It
has been studied by the Eid (2012), where he said that motivation and self-efficiency contribute
to improving the service quality, efficiency, and effectiveness of the employees at the workplace.
Further, performance and motivation are interrelated with each other to beat the competitors in
the global market (Norman et al, 2010). If the company improves the quality of the services and
efficiency of the employees then it provides various advantages to the company. It also helps to
understand and evaluate the plans, policies, and strategies of the competitors across the world.
Thus, it increases the outputs of the company by providing motivation to the workers (Wang et
al, 2014).
The psychological capital provides a chance to share positive relationship between
individuals and organization to encourage and enhance the performance and productivity of the
organization as well as employees. The organization is trying to gain the competitive benefits by
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Organizational behavior
using psychological capital within the organization. Apart from this, positive psychological
capital decreases the damages and risks of the market (Cameron et al, 2011). It also reduces the
impacts of the negative activities in the organization. The psychological capital is considered the
strong and effective strength of the company. Therefore, top management and managers must
invest the psychological capitals of the organizations in order to increase the outputs and
revenue. Choi and Lee (2014) said that psychological capital must be related to the field of the
organizational behavior and experience. It should be measurable and related to the efficiency and
performance of the employees for maximizing the outcomes of the firm (Norman et al, 2010).
Psychological capital also influences the behavior of the leaders and top management in the
organization. It helps to develop and build leadership styles among the managers within the
organization. It also develops and builds leadership skills, potential, and competencies among the
superiors. Now it can be said that psychological capital affects the positive and favorable
organizational outcomes and results (Norman et al, 2010).
On the above aforesaid information, it has been concluded that psychological capital
plays an enormous and significant role to maintain the sustainability of the organization. It also
helps to expand and explore the business activities and operations globally. Further, it also
influences the outcomes and results of the organization. The four components of the
psychological capital are used by every company to enhance the efficiency of the workers. In
addition, the firm must improve the elements of the psychological capital to reduce the obstacles
and to overcome the competitors in the global market.
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